Yash Chandani S/O Shri Sunil Chandani vs. Union Of INDIA

Held

The Court dismissed the bail applications of both petitioners, Gulam Fareed and Yash Chandani. The Court considered the nature and gravity of the accusations, the evidence collected by the DGGI, the severity of the punishment, and the larger interest of society. For Gulam Fareed, the Court noted that the Department found M/s Aravali Steels and M/s Apollo Steels were operated by him, and he systematically transferred goods without legal documents, destroying evidence afterwards. The evaded tax was to the tune of ₹13,61,76,573. For Yash Chandani, the Court found he was associated with M/s Yash Trading Company, involved in purchasing and supplying iron scrap without bills and tax receipts. Fake invoices and bills were allegedly prepared by him. The total loss estimated was ₹58.46 crores, with Yash Chandani individually assessed for causing a loss of ₹8,33,20,465. The Court concluded that both petitioners were involved in a systematic network to evade tax with the help of others. The collection of tax was deemed vital for the nation's growth, and evasion denies citizens opportunities for development. Given the seriousness of the offences and the supporting evidence, the Court found the petitioners not entitled to bail.

Facts

The Rajasthan High Court at Jaipur heard two connected bail applications filed by Gulam Fareed and Yash Chandani, who are accused of GST evasion. The Directorate General of GST Intelligence (DGGI) initiated an investigation based on intelligence inputs, leading to a complaint against the petitioners for offences under Section 132(1) of the CGST Act, 2017. The petitioners claim they are innocent and falsely implicated, arguing that the investigation focused on other individuals. Gulam Fareed's counsel stated he is not involved in clandestine deals with alleged masterminds and that his association with M/s Apollo Steels and M/s Aravali Steels, where the latter was owned by him, led to his implication due to a business relationship considered an offence by the department. Yash Chandani's counsel argued he is the proprietor of Yash Trading Company, involved in alleged clandestine purchase and supply of iron scrap without bills, and that the initial investigation was not against him. Both petitioners have been in custody since February 19, 2025.

Key Issues

1. Whether the petitioners are entitled to bail in light of the allegations of large-scale GST evasion under Section 132(1) of the CGST Act, 2017, considering the amount of tax evaded and the evidence collected by the Directorate General of GST Intelligence (DGGI)? Petitioner's Arguments: - The petitioners contend that the offence of evasion up to ₹5,00,000 is bailable, and beyond that, it is non-bailable and cognizable. They argue that the investigation focused on other individuals, indicating their innocence. - They claim the complaint is based on non-admissible and non-legal evidence. - Reliance is placed on the Supreme Court's decision in Vineet Jain v. Union of India, where bail was granted in identical facts with a maximum punishment of 5 years. - Gulam Fareed's counsel argues that his association with M/s Apollo Steels and M/s Aravali Steels, where the latter was owned by him, led to his implication, and that the department incorrectly views a business relationship as an offence. He asserts that only WhatsApp chats and messages link him to tax evasion. - Yash Chandani's counsel argues that the investigation was initially against other masterminds and that there is no evidence to show his involvement in tax evasion. - Both petitioners argue that the trial will take a long time and they are no longer required for investigation. Respondent's (State/DGGI) Arguments: - The petitioners are part of a large network of tax evaders who systematically evaded CGST in connivance with others. - Statements of accused recorded are admissible under law and indicate evasion. - Sufficient evidence has been collected to show a huge loss to the State exchequer. - This is a white-collar crime, and both petitioners are actively involved in clandestine tax evasion, proven by the material on record. - Reliance is placed on various High Court and Supreme Court orders where bail was dismissed in similar cases, emphasizing that petitioners must plead their own case and show entitlement to bail.